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The Competitive Paradigm in Spatial Economics

Author

Listed:
  • Jacques-Francois Thisse

    (National Research University Higher School of Economics
    Catholic University of Louvain)

Abstract

This paper discusses the reasons for the spatial impossibility theorem, which states that the competitive paradigm cannot explain the formation of large urban agglomerations and trade ows. This result is especially meaningful insofar as it is internal to the theory itself. We then briey explores dierent solutions to remedy to this methodological failure.

Suggested Citation

  • Jacques-Francois Thisse, 2016. "The Competitive Paradigm in Spatial Economics," HSE Working papers WP BRP 151/EC/2016, National Research University Higher School of Economics.
    • Handle: RePEc:hig:wpaper:151/ec/2016
    as

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    File URL: https://www.hse.ru/data/2016/09/27/1122371753/151EC2016.pdf
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    References listed on IDEAS

    as
    1. Miren Lafourcade & Jacques-François Thisse, 2011. "New Economic Geography: The Role of Transport Costs," Chapters, in: André de Palma & Robin Lindsey & Emile Quinet & Roger Vickerman (ed.), A Handbook of Transport Economics, chapter 4, Edward Elgar Publishing.
    2. Rebecca Diamond, 2016. "The Determinants and Welfare Implications of US Workers' Diverging Location Choices by Skill: 1980-2000," American Economic Review, American Economic Association, vol. 106(3), pages 479-524, March.
    3. Fujita,Masahisa, 1991. "Urban Economic Theory," Cambridge Books, Cambridge University Press, number 9780521396455, September.
    4. Jan Eeckhout & Roberto Pinheiro & Kurt Schmidheiny, 2014. "Spatial Sorting," Journal of Political Economy, University of Chicago Press, vol. 122(3), pages 554-620.
    5. Kristian Behrens & Gilles Duranton & Frédéric Robert-Nicoud, 2014. "Productive Cities: Sorting, Selection, and Agglomeration," Journal of Political Economy, University of Chicago Press, vol. 122(3), pages 507-553.
    6. Starrett, David, 1978. "Market allocations of location choice in a model with free mobility," Journal of Economic Theory, Elsevier, vol. 17(1), pages 21-37, February.
    7. Fujita,Masahisa & Thisse,Jacques-François, 2013. "Economics of Agglomeration," Cambridge Books, Cambridge University Press, number 9781107001411, September.
    8. Arvind Panagariya, 1998. "Do transport costs justifyregional preferential trading arrangements? no," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 134(2), pages 280-301, June.
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    11. Walter C. Labys & Chin W. Yang, 1997. "Spatial Price Equilibrium As A Foundation To Unified Spatial Commodity Modeling," Papers in Regional Science, Wiley Blackwell, vol. 76(2), pages 199-228, April.
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    13. Hamilton, Bruce W., 1980. "Indivisibilities and interplant transportation cost: Do they cause market breakdown?," Journal of Urban Economics, Elsevier, vol. 7(1), pages 31-41, January.
    14. Edward E. Leamer, 2007. "A Flat World, a Level Playing Field, a Small World After All, or None of the Above? A Review of Thomas L Friedman's The World is Flat," Journal of Economic Literature, American Economic Association, vol. 45(1), pages 83-126, March.
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    More about this item

    Keywords

    space; transport costs; land rent; general equilibrium;
    All these keywords.

    JEL classification:

    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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